Australia: Tunnel to nowhere? Azizi v Roads and Maritime Services

The recent Land and Environment Court (LEC) decision of Azizi v Roads and Maritime Services [2016] NSWLEC 97 (Azizi) is the first to consider s62(2) of the Land Acquisition (Just Terms) Compensation Act 1991 (JT Act) which sets out when compensation is payable where subsurface land is acquired for the purposes of constructing a tunnel.

The case is of interest because it had the potential to have far reaching implications. If the LEC had concluded that the applicant landowner was entitled to compensation, the decision was likely to have enlivened claims for compensation by landowners for the sub-surface acquisition of land for tunnels. As explained in this article however, the LEC found that no compensation was payable to the applicant landowner.

Background

In Azizi, the LEC considered a preliminary question of whether the compulsory acquisition of substratum land at Beecroft as part of the Northconnex project (Land) was compulsorily acquired for the purposes of constructing a tunnel within the meaning of s62(2) of the JT Act. If the answer was "yes", no compensation was payable to the landowner.

The Northconnex project involves the construction and operation of northbound and southbound twin dual carriageway road tunnels connecting the Hills M2 Motorway at West Pennant Hills to the F3 Freeway (M1) at Wahroonga (Project).

Relevantly, subsections 62(1) and (2) provide that:

  1. If the land compulsorily acquired under this Act consists only of an easement, or right to use land, under the surface for the construction and maintenance of works (such as a tunnel, pipe or conduit for the conveyance of water, sewage or electrical cables), compensation is not payable except for actual damage done in the construction of the work or caused by the work.
  2. If land under the surface is compulsorily acquired under this Act for the purpose of constructing a tunnel, compensation is not payable (subject to subsection (1)) unless:
    1. the surface of the overlying soil is disturbed, or
    2. the support of that surface is destroyed or injuriously affected by the construction of the tunnel, or
    3. any mines or underground working in or adjacent to the land are thereby rendered unworkable or are injuriously affected.

The landowner submitted that:

  1. The purpose of the acquisition is the commercial venture comprising the various components of the Project and therefore goes well beyond the construction of tunnels. Therefore, RMS needs to demonstrate that the words "constructing a tunnel" mean "constructing and using a tunnel".
  2. Sections 62(1) and 62(2) must be read together. A narrower construction of "tunnel" in s62(2) is in line with the meaning of "tunnel" in s62(1) (limited to tunnels for the housing of passive service installations) and should be preferred to a wider construction which includes not only the "construction" of the tunnel but its "use".
  3. A distinction should be made between passive and non-passive uses of a tunnel. This should be applied to section 62 so that, for example, "passive" service installations and tunnel construction should be read as being distinct and separate from the "use" of a tunnel.

Findings

The LEC largely agreed with RMS' submissions and held that no compensation was payable to the landowner. In particular, the LEC found that:

  1. The purpose of the Project (and therefore the purpose of the acquisition) is for the construction of two tunnels. After construction, the tunnels will be used as a dual carriageway for highways. The primary purpose is not altered by the fact that the management and financial delivery of the Project will be through a private consortium which will operate the highways as toll roads.
  2. It is clear that s62(1) and s62(2) address different circumstances. The first is directed to the acquisition of an easement or right to use land. The second applies to the acquisition of land for the purposes of constructing a tunnel. There is no statutory basis for construing the word "tunnel" in subsection (2) by reference to subsection (1) and the description in the parentheses of service installations.
  3. It would lead to an absurd result if s62(2) only applied to construction and not use of the tunnel. The LEC also considered such an interpretation to be troubling given the public resources at stake.
  4. There is no distinction between "passive" and "non-passive" uses of a tunnel. Just as the conveyance of sewage, water or electricity is a use, so is the use of a tunnel as a roadway.
  5. The LEC did not find the need to consider the second reading speech or extrinsic material which can be given weight in the event of ambiguity. The LEC held that the language of s62(2) is clear and unambiguous.

The case is a good example of the application of a well-established principle of statutory construction - the plain meaning of the text must be considered. Here, the LEC held that the words of s62(2) were clear and unambiguous in specifying that compensation is not payable for the construction of a tunnel unless the circumstances in s62(2)(a)-(c) arise. The case also provides clarity for public authorities acquiring substratum land, particularly in the context of not only the Northconnex but also Westconnex and future infrastructure projects.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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